The Semi-Professionals, Auction House Division
Collectors aren't the only ones who need a lesson on how to do business.
I cannot tell you the number of ways in which the pros at auction houses, er, make that alleged pros, screw up the most basic business practices.
Let’s start with responsiveness. When I was contemplating hanging out a shingle and becoming a solo practitioner attorney, I researched the business end of it first, just to see if I was cut out for it. I read a lot of business advice books for the legal services industry. I forget where I read it, but one piece of advice became my mantra as I was building my practice:
“I called you, you didn’t return my call, I called someone else and gave him my business.”
In a word, “responsiveness.” Not responding diligently and efficiently to inquiries is the number one complaint people have about service providers. It should be the number one complaint collectors have about auction houses. My experience over the last 20 years or so of consigning things for auction is that most of the auction houses ignore inquiries, or back-burner them for an unduly long time. I wonder if they have any idea what a crappy impression that makes? One auctioneer (I am going to not name all the names in this column, so I don’t get a bunch of whiny little bitch lawyer letters from butt-hurt auctioneers) literally advertised on a chat board for consignments and never responded to multiple emails I sent in response. Forget the fact that it was rude, it was stupid. Why bother advertising if you aren’t going to answer?
I recently decided to sell a large part of my collection. I am downsizing and let’s just say that I never saw a card I didn’t like.
The first auction house I tried took a while to respond but was interested. They told me I would have to pack and ship the collection from Cali on my dime. OK, I understand the need to pack and inventory my stuff, but we are talking about hundreds of dollars in shipping costs. Add that to their cut (20%; the buyer’s premium), and I said the hell with it. My advice in this situation is to wait for an auctioneer who sends reps into your area. I got an email from another house that they were going to be in Los Angeles, and they came to my office and picked up a tidy five-figure consignment.
Shipping your winnings is another nightmare. If the auctioneer ships, that is. One of the worst experiences I had was winning a lot from an auctioneer that does not ship. You must hire a third-party packer/shipper to get your stuff and send it to you. It was a logistical and financial nightmare and the twerps even busted one of the cabinet cards I won. My recent win at another house was a cautionary tale. I won two lots at the $25 minimum bid, with $5 each BP = $60. Shipping was $19.54 more because those buggers have a $19 shipping minimum and a per-order insurance surcharge. The latter pisses me off whenever I see it because it is a pure profit center. Auctioneers have blanket insurance policies, they don’t buy insurance separately for each order (if they do, they are idiots because they can get a blanket policy for much less money). One reason I love dealing with REA (I will name them) is because they have a published rate table for shipping and if there is an extra charge, the listing calls it out.
Another client service nightmare with some auctioneers is that they will not commit to a schedule for selling your stuff. I want my stuff sold in a reasonable time. One auction house rep picked up my stuff in February and went radio silent. For six months. I finally got fed up seeing several auctions go off without my items and started making noise. Again, crickets, until I trotted out the lawyer letterhead and started making court noises. The rep finally responded with some BS excuses about COVID and then told me what was really going on. The writers were having trouble with some of my items, and rather than call me to ask, they just kept back-burnering my consignment. I got it back (after I threatened to sue for its return) with dust and silverfish in the box. Yeah, thanks for nothing, you buttholes. My advice is to go with an auctioneer that has a set schedule of auctions and who will tell you when your stuff will go on the block.
Getting paid is always fun, but sometimes not so easy. One auctioneer from the old school had a nasty habit of not paying consignors. Even with that, there were many who’d call him a good guy because of their wins. Other auctioneers have a set schedule of payments, and you will get paid, on the last day of that schedule. In effect, you make a short-term loan to them for 45 days. For some others, it is just random.
Lots of auctioneers offer cash advances. Make sure to read the fine print before you take their money. Some of them charge interest of as much as 1.5% per month for the advance.
You may be wondering what protection you have if the auctioneer goes out of business or has its assets seized by a creditor. The answer will surprise you. When you hand over your cards to an auctioneer on consignment, and the auctioneer goes broke or has its assets seized, your cards go into the pool of assets that the auctioneer has, along with the office equipment, and you have to make a claim on them as an unsecured creditor. There is a cheap, easy and 100% effective way to avoid this. Go to the web site for the secretary of state for the state where the auctioneer is located and file a UCC-1 form listing your cards. That transforms you from an unsecured creditor into a secured creditor. It costs like five bucks but can save you if the auctioneer goes belly up suddenly, like Mastro and Legendary did when they got busted and went into bankruptcy. The secured creditors were guaranteed to get their stuff back if they filed a claim; the unsecured creditors, not. Their stuff could have been sold off and the proceeds pooled for distribution to all the creditors. As unsecured creditors you can expect pennies on the dollar after the higher classes of creditors take their cuts.
Whew, that’s a lot of smack talk about auctioneers, and you may be wondering who I use, if anyone. Well, top of my list are Robert Edward Auctions, Love of the Game Auctions, and Sterling Auctions. All are honestly and properly run by good people. I consign and buy from all of them without a qualm.